Michigan Attorney General Dana Nessel joined 17 other attorneys general earlier this week in urging collaboration between Federal Trade Commission (FTC) regulators and state attorneys general to protect workers from anticompetitive labor practices that depress wages and limit job mobility and opportunities for advancement.
In a comment letter filed in connection with the FTC’s hearings on competition in the 21st Century, the coalition argues that the FTC should increase its focus on antitrust enforcement in labor markets and use their authority to crack down on non-compete and no-poach contract agreements—in addition to considering how workers are impacted by proposed mergers.
“In an era where wages continually decline and workers’ protections, like prevailing wage, are routinely stripped, we must begin reviving antitrust regulation in labor markets,” said Nessel. “We must do this to protect workers from harmful anticompetitive practices such as targeting low-income workers by forcing them to sign non-compete agreements and ultimately limiting their earning potential.”
Antitrust laws work to protect competition in markets, benefiting both consumers and workers. These laws typically work to prevent harmful practices such as monopolization, price-fixing and market allocation, which can result in higher prices, depressed wages, decreased supply of products, or lower quality products and services. State attorneys general and the FTC have a strong interest in protecting the competitiveness of markets and can work both independently and collaboratively to take enforcement action to stop antitrust law violations.
Recent labor related antitrust actions brought by state attorneys general have confronted restrictive contract agreements and proposed mergers. In fact, Nessel joined a multi-state lawsuit last month against the anticompetitive T-Mobile and Sprint mega-merger, where one of the main concerns is how potentially harmful it would be to thousands of hard-working laborers in the telecom industry across the nation. Nessel and the coalition also cited that the merger could result in substantial loss of retail jobs and lower pay for these workers in the near future.
In their comments, the attorneys general urge the FTC to consider the effect of non-compete, non-solicitation and no-poach agreements due to the limitations they impose on job mobility of workers by directly impacting their opportunity to seek better wages and/or opportunities. These agreements can also prevent competition amongst employers in offering suitable wages, benefits and work environments to obtain the best talent.
Non-compete agreements prevent employees from seeking work with a competing company. Non-solicitation agreements prohibit employees from soliciting current coworkers to move with them to a new job and may effectively act as a non-compete agreement.
Certain types of no-poach agreements prevent employees from leaving one franchise to pursue a better job at another franchise in the same chain. As a result of the impact on laborers, the letter urges the FTC to ban non-compete agreements for low-wage workers, as many states have done, and keep no-poach agreements within a franchise.
The letter follows a recent series of hearings by the FTC on antitrust issues facing today’s government antitrust enforcers. The comments emphasize the importance of advancing antitrust enforcement and collaborating with the FTC to protect workers in today’s rapidly evolving economies.
Nessel joins the attorneys general from California, Delaware, District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and Washington.
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